Tech News & Commentary

Xiaomi looks like Simpsons Apple parody, but is growing fast

Chinese smartphone maker Xiaomi may look like a parody of Apple done by "The Simpsons," but it poses a threat to Apple and Samsung, especially in emerging markets.

In 2008, the animated comedy "The Simpsons" parodied Apple (NASDAQ:AAPL) CEO Steve Jobs as Mapple CEO Steve Mobbs. The episode made fun of Apple products like the iPod, iPhone and iPad by calling them the MyPod, MyPhone and MyPad. Apparently Xiaomi has crafted its business model around a similar premise, copying Apple products with its Mi phone and Mi Pad.

Xiaomi founder and CEO Lei Jun has modeled himself after Jobs and even wears a black shirt and blue jeans like the late Apple co-founder. Bloggers have had fun pointing out how Xiaomi's marketing and press events closely resemble those of Apple.

But Xiaomi differs by selling devices at much lower prices than Apple or Samsung. Its smartphones have proved very popular with young people in China.

Now Xiaomi is expanding into new geographies, such as India, Indonesia and Malaysia, and new product categories, including televisions, set-top boxes and fitness bands.

In a research report Thursday, ISI analyst Bill Whyman called Xiaomi "a new disruptor" in the smartphone market. The Beijing-based company was founded in 2010 but is on pace to generate $11.5 billion in sales and ship 60 million smartphones this year, Whyman said. In the second quarter, Xiaomi topped South Korea's Samsung to become the No. 1 smartphone vendor in China, research firm Canalys reported.

"Xiaomi is poised to disrupt the smartphone market and became a scale player," Whyman wrote. "We recently met with Xiaomi in Beijing and are very impressed with the progress they're making. ... We believe Xiaomi's success is driven by three factors: 1) selling high-quality phones paired with their own software interface (MIUI), apps and services, 2) very low prices, 3) building a unique Chinese brand. We believe Samsung is the big loser, while HTC and to a lesser extent Apple, which is better protected by its stellar brand, also face pressure."

Xiaomi has made its mark by selling high-end phones with leading-edge components at less than half the price of comparable Samsung Galaxy or Apple iPhone handsets, Whyman said. A Xiaomi smartphone with a Qualcomm (NASDAQ:QCOM) Snapdragon 2.5 GHz processor, 5-inch display and 13-megapixel camera costs about $320 unsubsidized, he said.

"Self-consciously modeled on Apple's success, Xiaomi has built an incredible following in China and increasingly in Asia, complete with its own Mi-fans akin to Apple fanboys," he said.

Privately held Xiaomi is expected to go public, Whyman said.

With Xiaomi copying Apple's products and marketing, an obvious question to ask is whether Apple will sue the upstart for patent infringement. Patent expert Florian Mueller told IBTimes UK that trying to enforce patents in China is difficult and could result in a potential backlash.

Also, Apple may have lost its appetite for patent litigation after having poor results suing Samsung, Motorola and HTC, he said.

Xiaomi is sticking with developing markets for now, but if it tries to enter the U.S. or Western Europe, Apple and others likely would take it to court, Mueller said.

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